TD Cowen: Progress on the cryptocurrency bill is hindered, and it's not just the controversy over stablecoin yields

Investment bank TD Cowen stated that the disagreements surrounding the CLARITY Act go beyond the issue of stablecoin yields, and multiple real-world obstacles may slow down the legislative process.

First, the Commodity Futures Trading Commission is understaffed, with only one commissioner currently in office. In this situation, Congress is unlikely to feel comfortable handing over more cryptocurrency regulatory responsibilities to the agency, and filling the personnel gaps will take months. Second, the issue of prediction markets is heating up. Whether to include it in the bill's regulation, as well as potential insider trading and conflicts of political interest (including controversies related to Trump-related projects), may lead some Democratic lawmakers to oppose the bill.

At the same time, the ongoing controversy surrounding the Trump family's cryptocurrency project World Liberty Financial is increasing the political sensitivity of the bill, making bipartisan consensus harder to achieve. Geopolitics has also become a variable. Discussions about Iran potentially using cryptocurrency payments are reinforcing the focus on anti-money laundering provisions and could even introduce amendments detrimental to the industry. Additionally, some lawmakers are attempting to include the Credit Card Competition Act, which, if advanced, could trigger new conflicts of interest and further delay the overall legislation.